What Employers Can Expect From The Trump Administration

Franczek P.C.

Franczek Radelet P.C.

Like the rest of the country, employers and HR professionals are left wondering what Donald Trump’s unexpected election as President means for the country. The Trump campaign was often light on detailed policy proposals, but will now presumably craft an agenda with the help of Republican majorities in both the House and the Senate. Based on public statements and prior Republican policies, we do have some idea of what we might see from the incoming administration.

Affordable Care Act Repeal. President-elect Trump routinely promised to repeal and replace Obamacare “on Day One.” Speaker of the House Paul Ryan and Senate Majority Leader Mitch McConnell have already promised to deliver legislation which fully repeals the law. However, how the Trump Administration and Congressional Republicans will fashion a “replacement” for Obamacare is less clear. While Trump proposed “broaden[ing] healthcare access,” and often mentioned permitting health insurance plans to be sold across state lines, he has not specified what, if any, ACA regulations would still apply to employer-provided health insurance or the health insurance industry more generally. More recently, he has suggested that rather than an outright “repeal,” he may instead seek to preserve certain aspects of the Affordable Care Act, including the ban on preexisting condition exclusions, and the rule allowing young adults to remain on their parents’ health insurance plans until age 26. While some significant change is likely, for now employers (and the rest of the country) are largely in the dark as to what those changes may look like.

Employment Discrimination. Under President Obama, the Equal Employment Opportunity Commission took aggressive positions on several key employment discrimination issues. For example, the EEOC has taken the position that discrimination against gay and lesbian employees constitutes unlawful sex discrimination under Title VII of the Civil Rights Act of 1964. It has also sought to extend Title VII protections to transgender workers and made pregnancy discrimination one of its enforcement priorities. While President-elect Trump has at times expressed general support for LGBT rights, it seems likely that his appointees to the EEOC will have a far more conservative outlook than the commissioners appointed by President Obama. As a result, the EEOC will likely reverse course on some of its more recent interpretations of the laws it enforces. While budget proposals have yet to be released, it also seems likely that the EEOC may see reductions in its enforcement budget, possibly meaning fewer investigations and fewer lawsuits against employers. While some of this may be welcome news to employers, budget cuts could also affect programs that offer significant value to employers, such as the EEOC’s free mediation program, and may also increase the time the EEOC takes to process and investigate charges.

Immigration. President-elect Trump’s hallmark issue throughout the election was immigration, and it is sure to be a focus of his presidency. Trump has stated that he favors making the now-voluntary E-Verify employment eligibility verification system mandatory. He has also talked of changing the H1-B visa program by raising the prevailing wage (making it more expensive for employers to fill with H1-B workers) or requiring employers to do more to hire Americans before seeking to hire foreign workers. Finally, Trump’s campaign proposed selecting immigrants “based on their likelihood of success in the U.S. and their ability to be financially self-sufficient.” In the short-term, President-elect Trump has promised to dramatically increase efforts to deport undocumented immigrants, suggesting his administration may deport up to 3 million immigrants in his first term. While details of these programs have yet to emerge, part of this effort may include a return to the Bush administration practice of conducting SWAT-style raids on workplaces with significant immigrant populations.

Labor Relations. Trump has expressed support for right-to-work laws, but he has not otherwise said all that much for or against labor unions. However, Vice President-elect Mike Pence defended Indiana’s right-to-work law as governor. Trump’s main influence on labor law may come from his appointments to the National Labor Relations Board, which are likely to be more employer-friendly (or at least less employer-hostile) than those appointed by the Obama administration. While it will take time for those appointments to have any influence on decisions from the NLRB, it is entirely possible that many of the more controversial positions taken by the current NLRB will be reversed in future Board cases.

Minimum Wage. During his campaign,Trump often emphasized populist themes and has expressed support for increasing the minimum wage. However, as with many of his campaign policy proposals, he has been inconsistent and the details of what he would support remain unclear. It is equally unclear whether Trump would find support for a minimum wage increase in a Republican-controlled Congress.

New Overtime Exemption Rule. For the last several months, we have been counseling clients on compliance with the new overtime regulations implemented by the Obama administration, which go into effect on December 1, 2016. The results of the election do not change the rules or delay their implementation, although it is entirely possible that the Republican-controlled Congress may revisit the issue once President Trump takes office in January. For more details, see the recent post on our Wage and Hours Insight blog.

Paid Maternity Leave. In September, President-elect Trump and his daughter, Ivanka Trump, unveiled policy proposals aimed at lowering child-care costs for families. The proposals included a plan to guarantee six weeks of paid maternity leave. According to the campaign, maternity leave would apply only to working mothers and would be financed through eliminating fraud in unemployment insurance. Whether that is a realistic funding mechanism remains an open question, and once again employers are left waiting for the details of the program to emerge. 

Equal Pay Legislation.President-elect Trump’s stance on equal pay legislation is unclear. His campaign had no official policy on legislation to address the gender pay gap, and the Republican National Committee’s official platform did not address the issue either. Trump has said in the past that women who work as hard as men will “make the same if [they] do as good a job,” but has also expressed skepticism about new legislation addressing equal pay. Ivanka Trump included a promise to “fight for equal pay for equal work” in her speech at the Republican National Convention. Congressional Republicans have previously opposed new equal pay legislation.   

Supreme Court. Donald Trump’s impact on the Supreme Court may be profound. By refusing to confirm President Obama’s nominee, Judge Merrick Garland, to succeed Antonin Scalia, Senate Republicans ensured that President Trump will have at least one vacancy to fill immediately. During the campaign, President-elect Trump published a list of nearly two dozen potential Supreme Court nominees, and most expect him to pick Justice Scalia’s successor from this group. It is unclear when a Trump nominee would receive a hearing and confirmation vote, but few doubt that such a vote will happen. With a conservative leaning court secured, potentially for another generation, the following issues will be worth following:

  • Transgender Issues: The Court has granted certiorari in Gloucester County School Board v. G.G., a case involving the federal government’s interpretation of “sex” as it related to a transgender student. While not directly applicable to employers, the Court’s ruling could impact how employers are required to accommodate their transgender employees.  
  • Arbitration Agreements & Class Action Waivers: Some employers include in their employment agreements provisions which required employees to arbitrate their disputes individually, and require them to waive their right to engage in class action. This May, the Seventh Circuit ruled that agreements that required employees to sign such an agreement ran afoul of employees’ rights under Section 7 of the National Labor Relations Act (NLRA). This has created a circuit split which the Court may resolve shortly.
  • Administrative Power: The Court is already scheduled to hear several cases on the breadth and reach of executive authority, reviewing executive orders issued by and appointments made by President Obama. A Trump-appointee confirmed by a Republican Senate may be more skeptical of executive authority and regulatory power than Judge Garland.

Federal Contractor Regulations & Executive Orders. Throughout his administration, President Obama has aggressively regulated federal contractors, from increasing the minimum wage for federal contract employees to $10.10 per hour, to requiring contractors to maintain data and records on employee pay according to gender and race. President-elect Trump could overturn and nullify those orders with the stroke of a pen, and has in fact promised to cancel most of President Obama’s executive orders on his first day in office.   

State and Local Laws. While federal law is certainly important, employers should not forget that they are also subject to regulation by states and even municipalities where they operate. “Blue” states and cities in particular may redouble their efforts to regulate employers if they perceive that the federal government is stepping back from necessary regulations. This trend has been accelerating even under the Obama administration, with multiple jurisdictions adopting higher minimum wages, paid sick leave, and other new requirements for employers. Expect this trend to continue.   

What Now? Since details have yet to emerge on most of President-elect Trump’s policy proposals, employers are, like the rest of the country, in a “wait and see” mode. It seems likely that employers will face a friendlier regulatory environment under a Trump administration than they did under President Obama, but many of the changes that can be expected will happen over time as Trump appointees take office and begin to implement their agendas in place of those pursued by the Obama administration. Other issues, like repealing or amending the Affordable Care Act, will require Congressional action and may not take effect for several years given the scope and complexity of law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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